Comments on: Commercial Real Estate Investing – The Refinance Nightmare

By: Kate

Kate — Wed, 30 Jul 2008 11:26:40 +0000

Yes! Commercial refinancing is a hurdle. I have tried refinancing my little shop a couple of times and have had many problem. They are just to strict and their are not enough to choose from. I have had no luck with online brokers. Nice post.

By: Glenn Fydenkevez - President, MasterPlan Capital

Glenn Fydenkevez - President, MasterPlan Capital — Fri, 04 Jul 2008 13:02:43 +0000

Here is my opinion as-to-why your deal is not getting done; the banks can’t sell the loans they write.
No loan buyers; no loans. They are issuing conditional approvals then stalling as long as they can in hopes that the secondary market for commercial mortgage paper will improve. When it doesn’t, they make up a reason to kill the deal. It’s the liquidity Crises!

It’s not interest rate volatility (when have rates not been volatile), it’s not falling real estate prices (the property cash-flows and a good appraiser can determine value in all markets), it’s not tightening underwriting standards (the property is top quality and can pass even stringent underwriting) it’s not the shrinking lender pool (there are trillions of dollars in lending capacity on the side-lines) and it’s not environmental concerns (lenders have insurance for that). The-fact-of-the-matter is that they won’t issue you a loan because they are not confident that they can turn it into cash by selling it to Wall Street. They do not want to hold paper against your shopping center and earn 6.5% for the next 20 years. They want to make a point, sell the paper and use the money to make another loan, make a point on that one, sell that paper…and-so-on, and-so-on…

This project needs a portfolio lender (someone who does not sell their loans) or the broker needs to find a lender who can still move their paper. They are out there.

As-to mortgage brokers, my advise is to use a commercial specialist from a commercial only firm. A lot of people give their residential guy or gal a shot and, in this market, get very frustrated, very quickly. The commercial process is very different and the commercial mind-set is very different. You have to find a lender who’s making deals and closing loans, they know where the money is and they can secure approvals for their clients.

By: MoneyMan

MoneyMan — Sat, 14 Jun 2008 21:58:07 +0000

Good news…The American dollar seems to have hit bottom and is now just starting to recover. This will start to have a positive impact on all money matters imho.

By: Chris Lengquist

Chris Lengquist — Tue, 10 Jun 2008 00:44:24 +0000

I’ve been doing father/son trips for 11 years now. They sure build memories.

Sorry to hear about your challenges. I think items #3 & #4 are the ones that drive me the most nuts.

By: Joshua Dorkin

Joshua Dorkin — Sun, 08 Jun 2008 20:48:11 +0000

Korina –
A blanket statement such as “avoid mortgage brokers you meet on a forum” is probably a bit much. We’ve got dozens of really good mortgage brokers as members of our forum, and I’d recommend them over others any day of the week!

By: Pamela Grundy

Pamela Grundy — Sun, 08 Jun 2008 19:01:38 +0000

Expect this to get worse, not better in the coming year or so. While sometimes a refi just has to happen, anyone who can wait it out will save themselves a LOT of agony, as you are discovering right now. Thanks for a great post, good advice.

By: Korina Meza

Korina Meza — Sun, 08 Jun 2008 18:06:15 +0000

Real Estate has become a poopular business now in all over the world and everyone wants to earn more. So, this is a best way i can say to increase money because it has lesser risk as compare to other sources to increase finance with a fast speed.